EXHIBIT 10.20
EMPLOYMENT AGREEMENT
This Employment Agreement (this "AGREEMENT") is made and entered into
as of January 21, 2003 by and among (i) Lumenis Ltd., a company incorporated
under the laws of the State of Israel, with offices at the New Industrial Park,
Yokneam, Israel ("LUMENIS LTD."), (ii) Lumenis Inc., a company incorporated
under the laws of the Commonwealth of Massachusetts, with offices at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, XXX ("LUMENIS INC." and, together with Lumenis Ltd.,
the "COMPANIES") and Xx. Xxxxx Xxxxxx (the "EXECUTIVE").
WHEREAS, the parties have signed a Letter Agreement dated March 1, 2002
("LETTER AGREEMENT"), pursuant to which the Executive was first employed by
Lumenis Ltd. and appointed as Executive Vice President and Chief Financial
Officer thereat;
WHEREAS, the parties have agreed on certain changes to the employment
terms of the Executive and wish to establish their contractual relations and
incorporate said changes, all pursuant to the terms and conditions set forth in
this Agreement; and
WHEREAS, the Executive and the Companies desire to terminate the Letter
Agreement and enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, terms and conditions hereinafter set forth, and for other good and
valuable consideration, the receipt of which is hereby specifically
acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT. Lumenis Ltd. hereby employs the Executive in the capacity of the
Executive Vice President and Chief Financial Officer and Lumenis Inc. hereby
employs the Executive as Chief Financial Officer, all upon the terms and subject
to the conditions set forth below. The Executive hereby accepts employment with
the Companies in such capacities and upon the terms and subject to the
conditions set forth below.
2. DUTIES. (a) The Executive agrees to devote his full business time (except for
existing director positions at Apex Silver Mines, Ltd., Datawatch Inc. and Bear
Creek Mining and certain exceptions as approved from time to time by the Chief
Executive Officer of Lumenis Ltd. ("CEO")), attention, best efforts and ability
to the affairs of the Companies. The Executive shall report to the CEO. The
Executive shall have responsibility for the financial affairs of the Companies
and their subsidiaries, with the powers and duties as are customarily assigned
to the chief financial officer and/or as otherwise may be defined by the CEO
from time to time.
While performing services for the Companies, the Executive shall not
engage in any activities that may interfere or conflict with the proper
discharge of his duties.
3. TERMS AND TERMINATION. The term of this Agreement shall commence on March 1,
2002 and shall continue in full force and effect until terminated pursuant to
the terms hereof.
(a) This Agreement and the Executive's employment may be terminated (A) at
any time at the option of either the Executive or the Companies, upon
ninety (90) days prior written notice ("PRIOR NOTICE"); (B) upon the
death of the Executive; (C) in the event of the inability of the
Executive to perform his duties hereunder,
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whether by reason of injury (mental or physical), illness or otherwise,
incapacitating the Executive for a continuous period exceeding sixty
(60) consecutive days or a total of sixty (60) non-consecutive days in
any six (6) month period; or (D) for Cause. For purposes of this
Agreement, "Cause" shall consist of:
(i) Dishonesty of the Executive affecting the Companies;
(ii) The Executive's conviction of a felony or any crime involving
moral turpitude, fraud or misrepresentation;
(iii) Any gross negligence or willful misconduct of the Executive
resulting in material loss to the Companies or any of its
affiliates or material damage to the reputation of the Companies
or any of its affiliates; and
(iv) Any material breach of any of the provisions of this Agreement.
(b) Subject to the provisions of subsection (c) hereunder, in the event of a
termination of this Agreement and the Executive's employment by the
Companies pursuant to a Prior Notice, the Companies shall only be
obligated to pay to the Executive (i) the Executive's base salary and
benefits through the Prior Notice period specified above, provided that
the Executive continues to perform his employment obligations through
such period, and (ii) a lump sum severance payment equal to one (1)
month's base salary per each twelve (12) month period of the Executive's
employment with the Companies (whether or not pursuant to this
Agreement), according to the base salary paid to the Executive on the
date of such Prior Notice, and a pro-rata portion for any shorter period
(based on the Israeli law principle for severance) (the "SEVERANCE
PAYMENT"). The Companies shall have no further obligation to make any
salary payments or provide any benefits to the Executive after the
expiration of such Prior Notice period, except as required by applicable
law and as described hereunder. Notwithstanding the foregoing, the
Companies may, in their sole discretion, elect not to require the
services of the Executive during the Prior Notice period (but in such
case shall continue to pay the Executive's base salary and benefits
through such period).
(c) Notwithstanding the foregoing, in the event of termination of this
Agreement and the Executive's employment hereunder (i) pursuant to a
Prior Notice initiated by the Companies, (ii) a Change of Control (as
such term is defined in the Lumenis Ltd. 2000 Share Option Plan), or
(iii) by the Executive for "good cause", including, without limitation,
where the Executive's duties are materially diminished, the Executive is
required to relocate or compensation and benefits due to him are
reduced, then, subject to the Executive executing a waiver and release
of all actual or potential claims, the Companies shall be obligated to
pay the Executive (A) a total lump sum amount of $300,000 (three hundred
thousand United States Dollars), as well as all benefits described in
Section 5 hereunder for a twelve (12) month period beginning from the
effective date of such termination,
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(B) full bonus participation (as described in Section 5(c) hereunder)
for the calendar year in which termination occurs, as if the Executive
had been employed by the Companies for the entirety of such calendar
year, and (C) accelerated vesting of all unvested options that would, by
their terms, vest in the twelve (12) month period following the
effective date of termination.
4. BASE SALARY. As compensation for services rendered hereunder, the Companies
shall pay the Executive a base salary of U.S. $250,000 (two hundred and fifty
thousand United States Dollars) per annum, payable in twelve (12) equal monthly
installments in accordance with the standard payroll dates and practices for
salaried personnel of the Companies during the term of this Agreement. The CEO
shall review the Executive's salary level annually or at such other times as the
CEO shall determine. The Companies and the Executive shall reconcile any
difference between all advances on account of salary made to the Executive prior
to the date of this Agreement and any balance, if in the Executive's favor,
shall be paid to the Executive, and if in the Companies favor, shall be credited
against future salaries.
5. BENEFITS. In addition to the compensation set forth in Section 4 above, the
Executive shall receive the following benefits from the Companies, it being
understood that any wage-based benefits shall be calculated exclusively on the
basis of the base salary (without consideration to any other benefit) in effect
from time to time;
(a) VACATION. The Executive shall be entitled to twenty-five (25) business
days of vacation per year in accordance with Companies' policies. The
specific dates of such vacations shall be coordinated in advance with
the CEO.
(b) CERTAIN BENEFITS. The Companies shall grant the Executive all benefits,
such as pension, 401(k) plan, life insurance, health insurance,
disability insurance, certain saving programs and others as are granted
from time to time to the Companies' senior executives in the Executive's
rank and under their usual terms pursuant to the Companies policies in
effect from time to time, provided that nothing contained in this
subsection (b) shall prohibit the Companies from amending, revising,
restricting, reducing or eliminating any or all of such benefits
provided to the Companies' employees and senior executives, as a result
of the Companies' financial condition or prospects.
(c) PERFORMANCE BONUS. The Executive will be eligible to participate in the
Lumenis Ltd. Bonus Plan for executive officers at a 100% base
participation rate for meeting 100% targets such as revenue, profit and
other corporate and personal targets as will be set by the CEO in
writing and as shall be approved each calendar year by the Board of
Directors of Lumenis Ltd.
(d) OPTIONS. The Executive will be eligible to receive periodic grants of
options as part of the total compensation as recommended by the CEO in
writing and approved by the Board of Directors of Lumenis Ltd.,
consistent with Lumenis Ltd.'s practice of compensating executive
officers and as per stock option plans in effect from time to time.
Nothing in this subsection (d) shall require the
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Companies to grant to the Executive a specific or minimum number of
options at or during any period of time.
(e) CERTAIN REIMBURSEMENTS. The Executive shall be entitled to full
reimbursement from the Companies for expenses incurred during the
performance of his duties upon submission of substantiating documents,
according to the Companies standard policies. Without limiting the
foregoing, the Companies shall, during the term of this Agreement,
reimburse the Executive up to a total amount of US $9,000 (nine thousand
United States Dollars) for country club dues.
6. CONFIDENTIAL INFORMATION. The Executive agrees not to divulge or use, except
in furtherance of the Companies' business at any time during his employment as
well as after the termination of his employment with the Companies, any
confidential and other proprietary information (as further defined below,
"CONFIDENTIAL Information") obtained at any time, disclosed to the Executive or
developed by the Executive in the course of the Executive's employment with the
Companies, or regarding the business of either the Companies, their
subsidiaries, any company in which the Companies hold, directly or indirectly
(i) a 5% interest (or greater) in the equity or profits thereof, or (ii) any
right or power to appoint one or more managers, directors or other individual(s)
performing similar functions ("AFFILIATE") , or any of their customers, except
that the Executive may disclose certain necessary information to co-workers
employed at the Companies and to third parties when required to do so in
connection with the performance of his duties hereunder. "Confidential
Information" shall include information which is not known to the public and
shall include, but not be limited to, trade secrets, know-how, data, technical
or non-technical information, whether written, graphic or oral, the names and
addresses of prospective or existing investors, customers, supply sources,
ideas, financial information, operations policies, marketing strategies,
business development plans, corporate assets, financial data and forecasts, and
historical financial results.
7. COVENANT NOT TO SOLICIT BUSINESS. (a) The Executive agrees that for a period
of one (1) year from the effective date of termination of this Agreement, he
will not directly or indirectly solicit any business from individuals or
entities that are customers of the Companies, their subsidiaries or Affiliates,
at the time of termination of this Agreement, without the prior written consent
of the Lumenis Ltd. Board of Directors.
(a) For a period of one (1) year from the effective date of termination of
this Agreement, without the prior written consent of the CEO, the
Executive shall not employ, offer to employ, or in any way directly or
indirectly solicit or seek to obtain or achieve the employment (any of
the foregoing, "Third Party Employment") of any person employed by the
Companies, their subsidiaries, any Affiliate, or any successors or
assigns thereof, except for persons who were not employees of the
Companies, their subsidiaries or any Affiliate on the effective date of
termination of this Agreement
(b) For a period of one (1) year from the effective date of termination of
this Agreement, without the prior written consent of the CEO, the
Executive shall not
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participate, directly or indirectly (whether as advisor, principal,
agent, partner, officer, director, employee, stockholder, associate or
consultant of), in any Business Entity (except for an equity interest of
less than 5% in any such entity). For purposes of this subsection (b),
the term "Business Entity" shall mean any person, partnership,
corporation or other business entity that, at the time of the
Executive's employment with the Companies, is involved in any direct
competition with the principal business carried on by the Companies or
its subsidiaries or any Affiliate prior to the date of this Agreement or
hereafter conducted by the Companies or any Affiliate or subsidiaries
during the term of this Agreement, anywhere in the world.
(c) The parties hereto agree that the duration and area for which the
covenant not to compete set forth in Section 7(b) above is to be
effective and reasonable in terms of geographical and temporal scope. In
the event that any court determines that such time period and/or area
are unreasonable and that such covenant is to that extent unenforceable,
the parties hereto agree that such covenant shall remain in full force
and effect for the greatest period of time and in the greatest
geographical area that would not render it unenforceable. In addition,
the Executive acknowledges and agrees that a breach of Section 6 or
subsections (a) or (b) of this Section 7 shall cause irreparable harm to
the Companies, their subsidiaries, and/or their Affiliates, and that the
Companies shall be entitled to specific performance of this Agreement or
an injunction without proof of special damages, together with costs and
reasonable attorney's fees and disbursements incurred by the Companies
in enforcing their rights under Section 6 and this Section 7.
8. INTELLECTUAL PROPERTY ASSIGNMENT. Any invention or know-how which shall occur
to the Executive during the period of his employment relating to the business of
the Companies or the use of any of their technologies, notwithstanding that it
is perfected or reduced to specific form at any time thereafter provided that
its conception arose during such period, including all rights therein and in any
patent or other form of legal protection with respect thereto, shall become the
sole property of the Companies, without need for any specific action or notice
or any consideration to the Executive other than as provided for by this
Agreement.
9. DEDUCTIONS AND WITHHOLDINGS. The Companies shall be entitled to deduct and
withhold from any amount payable to the Executive, whether pursuant to this
Agreement or otherwise, any and all taxes, withholdings or other payments as
required under any applicable law.
10. NO ASSIGNMENT BY EXECUTIVE. The Executive shall have no right to assign any
of the rights or to delegate any of the duties created by this Agreement and any
assignment or attempted assignment of the Executive's rights, and any delegation
or attempted delegation of the Executive's duties, shall be null and void. The
Companies may at any time assign any of their rights or delegate any of their
duties under this Agreement, provided that such assignee
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or delegee shall undertake in writing to perform all of the Companies'
obligations hereunder, and to be bound by all of the terms hereof.
11. CONDITIONS. The Executive represents that he has full authority to enter
into this Agreement and that the performance of his duties under this Agreement
will not interfere with or violate the terms of any other agreement, arrangement
or understanding to which he is a party or by which he is bound.
12. BENEFIT. Except as otherwise expressly provided herein, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, beneficiaries, personal representatives, and permitted
successors and assigns.
13. NOTICES. All notices hereunder shall be in writing and delivered by hand or
faxed or mailed to the address stated below of the party to which such notice is
given, or to such changed address as such party shall have given to the other
party by written notice provided, however, that any notice of change of address
shall be effective only upon receipt by the other party.
To the Companies:
Lumenis Ltd.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Executive Officer
To Executive:
Xxxxx Xxxxxx
00 Xxxxxxxx
XxxXxxxxxxxxx, XX 00000
14. SEVERABILITY OF PROVISIONS. If any of the provisions of this Agreement is
held invalid, such provisions shall be severed and the remainder of the
Agreement shall remain in force and shall not be affected thereby.
15. NO ORAL CHANGES. This Agreement may be changed only in writing, and must be
signed by the party against whom enforcement of any waiver, modification,
discharge or other change is sought.
16. WAIVER. Neither party's failure to insist upon strict compliance with any of
the terms, covenants or conditions hereof shall be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties hereto regarding the subject matter hereof, and supersedes and
cancels any and all prior
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agreements between the parties hereto, express or implied, written or oral,
relating to the subject matter hereof, including without limitation, the Letter
Agreement, dated March 1, 2002, filed as an Exhibit to the Lumenis Ltd.
Quarterly Report on Form 10-Q, dated May 15, 2002.
18. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York. Any
litigation concerning any claims under or breach of this Agreement shall be
brought exclusively in the competent courts of New York.
19. DESCRIPTIVE HEADINGS. The Section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
20. COUNTERPARTS. This Agreement may be executed in counterparts, each of which
shall be deemed an original, and all such counterparts shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the Companies and the Executive have executed this
Agreement, as of the day and year first above written.
LUMENIS LTD.
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
Chief Executive Officer
LUMENIS INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Chief Operating Officer
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
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